Hello everyone! I'm new to investing and have been trying to find a buy and hold property for a long time (off and on). I found a house on homepath and put an offer for 54,900 and the ignored (listed 67k), we went up by 5 k to 59,500 and they accepted!. I'm excited and hoping to close deal.
The house is in Southeast Houston which is a lower social economic area, but I'm find with that. I grew up in that neighborhood and made it out just fine! Now on to the question the house seem ready to move in..maybe just paint. Do you think I got a reasonable deal?
Side note..I'm looking at long term profit. I'm patient
MLS : 43020944
What will the rent be?
I'll inbox you my thoughts after i ran the numbers.
By just glancing probably the rent could be from 950 - 1050. Were there any major findings on the inspection? Is that hardwood or laminate?
Congrats on your first investment property, I think every investor in this forum can agree that your first deal is always the most difficult and it is ok to make mistakes as you will learn from them.
In order for you to know if you got a deal, you will have to find out
what does it rent for?
Whats your Return on Investment?
How much is your rehab?
Do you have capture equity?
This are only some of the many questions that you will ask yourself along the way that will help you figure out if you got a good deal.
Again, congrats and good luck investing!
Congratulations first and foremost......I am assuming that this property have some equity. Also as mention above the amount of rent you charge will play a part and how long your planning on keeping this property. But overall good job!
My realtor thinks it can rent for 850$. Yes, those are real hardwood floors. The house only needs paint. My contract was just aaccepted yesterday so no inspection yet. Any reccs my fellow Houston investors?
Keep in mind that with FNMA your 10 day inspection period begins once they accepted your offer not when the contract is signed. Meaning it started yesterday.
That house looks like it is in seriously good shape for that neighborhood.
Here are my concerns:
South Park is one of the most dangerous neighborhoods in Houston (it sounds like you are aware) We have wholesaled a couple properties in there. Its a stagnant neighborhood meaning its not going to appreciate much, and it looks like you are paying top of the market. Should you decide to owner finance the property, you could sell it for $85k and 20% down.
However your price to rent ratio is great, should not have a problem renting that house in there for 900, may want to try to get more than that to attract the right tenant.
Also, be sure to understand section 8 as most people will have a voucher.
@Sam Craven Thanks for your reply! I understand there is not much appreciation in that neighborhood, so I will patiently let someone pay off the house for me. I will shoot for 900$ and see! I plan to add the home to the section 8 list. @Greg H. thanks for that info, I will need to find someone asap even though my agent told me he wouldn't get one?
For an agent to suggest to not get an inspection is a big no-no ! When I am wearing my broker hat, I always suggest an inspection
When I am wearing my investor hat, I would not get an inspection as I would do it myself. That being said, I have 20+ years of doing this, but as someone new "you just don't know what you don't know !"
Make sure you agent is diligent in getting the listing agent to have utilities on and ready for inspection as this always seems to take time and now with a holiday week time is even shorter
KEEP YOUR 10 DAY INSPECTION PERIOD IN MIND AS YOUR EARNEST MONEY IS NON-REFUNDABLE AFTER THAT TIME
I am emailing him now. Thanks again for your valuable input!
@MONICA WATSON , congratulation. the house is in a decent shape. from the pictures, i don't see much other than paint touch up and carpet clean. Keep us posted on your journey.
@MONICA WATSON congrats on you first property. It looks like there are a lot of positives on this deal (some negatives too...). I would looks at this purchase as a positive step in gaining education into being a real estate investor. Hey, look at it this way; you did some homework, found what you think to be a good deal, and pulled the trigger. Your deals will only get better from here.
Congrats on the first deal! It's always the hardest one!
@MONICA WATSON If you can get $850 for a home that was purchased for basically $60,000, that is a great deal. Here in my area of CA, you need to pay about $200,000 to get anywhere near $1,500. You are getting about double that amount! Here is another way of looking at it. I pay cash for flips and wholesales, so I look at how many payments I need to receive from a renter if I ever had a hard time selling.
You paid roughly $60,000 and get $850, minus taxes and insurance. I have heard Houston has high property taxes that can go as high as 4%. What are you paying for property taxes and insurance? I estimated $250 per month in property taxes and fire insurance. If the home needs minimal repairs and you can keep it rented, you have $600 per month left over. $60,000 divided by $600 = 100 months to recoup all your cash spent to buy the home. That's just over 8 years to reimburse yourself for the entire cost of the home... that is really good! In my area.
Congrats on doing so well. I would like to hear how much you were able to get it rent, once you have those numbers :-)
The property taxes are approx. 1200$ yearly and I'm not sure about the hazard insurance yet. I will definitely update you once I rent the place!
Congrats! Not sure about Houston, but in my area the homepath homes are nice, much nicer than what one finds from HUD and pretty much rent ready.
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